Technology, cost could hamper efforts for 100 percent carbon-free grid in Minnesota by 2050

By midcentury, coal and natural gas could be erased from Minnesota's electricity grid, replaced by carbon-free power sources, particularly wind and solar.

That is the goal of Gov. Tim Walz, who is pushing legislation for a totally clean grid by 2050. Ditto for Xcel Energy with its target of 100% carbon-free electricity in the same year.

Reaching that target is a challenge, though, both because the technological path to completely carbon-free energy isn't clear yet and because it may be expensive, particularly the last mile from 80% clean energy to the total banishment of fossil fuels.

"There's no doubt that the last 20% is the most difficult and probably the most expensive," said Doug Scott, a vice president at the Great Plains Institute, a nonprofit energy research group in Minneapolis.

Walz sees his goal as a way to ensure reliable, affordable electricity while supporting a cleaner environment and the clean-energy industry. But a bill setting the 2050 goal has yet to get a Senate hearing, and opponents point to the uncertainties of cost and technology.

New battery technologies will likely be needed to meet the massive storage demands of a grid as energy sources shift from coal to resources such as wind turbines and solar panels.

Plus, Minneapolis-based Xcel — and government regulators — will need to figure out how nuclear power might fit in the picture. Its reactor licenses with the federal government are set to expire by the mid 2030s.

Xcel, Minnesota's largest utility, is confident that 80% carbon-free energy can be reached by 2030 using existing technology, including nuclear. Beyond that, the company is counting on advances that are largely on the drawing board today to reach goals it announced in December.

"The way I look at the 2050 goal, we have 30 years to get there," said Ben Fowke, Xcel's CEO. "I am open to anything that works cost-effectively."

Coal is still king for electricity production in Minnesota, providing 40% of the state's electricity generation, though it's retreating as utilities — particularly Xcel — plan to close coal plants by the mid 2020s.

In at least one way, Minnesota has an advantage in the quest to replace coal and other fossil fuels.

Compared with other states, Minnesota has some of the best wind resources in the country, energy analysts said. Wind now provides about one-fifth of electricity generation in the state.

Plus, new wind farms in Minnesota appear to be as cheap as new gas-fired power plants, even without federal tax subsidies for renewable energy, according to Bloomberg New Energy Finance.

While solar power comprises about 1% of electricity generation in the state now, and is more expensive than new gas power currently, the cost is likely to fall.

"The whole trend of all these technologies is that they get less expensive as time goes on," Scott said.

But since wind doesn't always blow and the sun doesn't always shine, managing the grid becomes more difficult as constant power sources like coal fade away.

As wind and solar become more prominent, however, there is a need to make them more stable sources of power.

Batteries will be necessary to store power until it's needed, and that work has begun. It helps that the benchmark price for battery storage as calculated by Bloomberg New Energy Finance has declined 76% from 2012 — 35% from the beginning of 2018.

Utilities have begun planning large battery projects, including Xcel in Colorado. Xcel also expects pilot projects in Minnesota over the next few years. The first fully commercial grid battery in Minnesota was launched last year by the Ramsey-based electricity cooperative Connexus Energy.

Grid batteries usually use the same chemical technology, lithium ion, as batteries for personal electronics and electric vehicles. Most lithium-ion grid batteries store two to four hours of electricity. But with a carbon-free grid, batteries will need to economically warehouse several days or even weeks of power, particularly during seasonal lulls in sunshine and wind.

"Long-duration storage needs to be an order of magnitude cheaper than lithium ion," said Jesse Jenkins, a postdoctoral fellow at Harvard University's Center for the Environment.

Betting exclusively on wind, solar and battery storage to achieve a 100% carbon-free grid "would be a big mistake," given the economic and technical challenges, concluded a recent study co-authored by Jenkins in the scholarly journal Joule.

Another big hurdle for carbon-free generation is the need for more electricity transmission and distribution capacity.

In 2016, a group of Upper Midwest utilities, including Xcel, switched on the last leg of a $2.1 billion transmission megaproject called CapX2020. It was aimed partly at freeing up power-line capacity for more wind energy.

"CapX2020 is really not enough," said Sam Gomberg, senior energy analyst at Union of Concerned Scientists. "The grid is fully subscribed. It is at capacity."

Another 22% of Minnesota's electricity is generated by nuclear energy, now the country's largest source of carbon-free electricity.

But it's still controversial among environmentalists, notably for the longstanding problem of radioactive waste disposal.

Plus, some nuclear plants in states with deregulated electricity markets aren't competitive with generators fueled by cheap natural gas. Minnesota's electricity business is regulated, and Fowke said Xcel's nuclear plants have been continually improving their operations and cost efficiency.

The federal licenses for Xcel's three nuclear reactors — one in Monticello and two at Prairie Island near Red Wing — expire in 2030, 2033 and 2034, respectively.

To get an idea of the nuclear fleet's importance, let's assume Xcel achieves its goal of 80% carbon-free energy in Minnesota by 2030. The company would drop back to 60% carbon-free power if all three reactors were closed by 2035 and not replaced by any new clean energy sources.

Building large new nuclear plants is a nonstarter these days, given the enormous expense and the huge cost overruns experienced by two projects under construction in the Southeast.

New nuclear-power technologies — much smaller reactors with lower price tags — are being developed. But it's not clear if they will succeed commercially; and they, too, produce radioactive waste.

The best bet for extending nuclear power's shelf life may be re-licensing existing plants for several more years of operation.

"If it can be done cost effectively and safely, pushing nuclear licenses another 20 years is an option and one that a lot of companies are considering," said Jenkins of Harvard's Center for the Environment.

Count Xcel among them. "I think we need to be open to it," Fowke said. "We have more work to do to see what the costs and benefits might be."

Xcel's nuclear plants opened in the early 1970s and were originally licensed for 40 years. In the late 2000s, Xcel petitioned the U.S. Nuclear Regulatory Commission (NRC) to re-license the plants for another 20 years. Many nuclear operators did the same.

Xcel may signal its long-term plans for the nuclear plants in a regulatory filing this summer.

As far as technology that's in the pipeline, scientists and businesses are working on several concepts, including one called carbon capture and sequestration. Like nuclear, it's controversial among some environmentalists, who see it as perpetuating fossil-fuel industries.

The idea is to separate carbon dioxide created from fossil-fuel generation and then store the stuff in underground rock formations.

"It's technologically feasible, but very challenging," said Frank Wolak, an economist at Stanford University, where he directs the Program on Energy and Sustainable Development. "You could sequester it, but would it be cost-effective?"

Carbon capture received a black eye from a $7 billion, vastly overbudget power plant in Mississippi, which was supposed to burn coal and store about two-thirds of its carbon-dioxide emissions. Last year, the utility that owns the plant scrapped coal and carbon capture and is instead just burning natural gas.

A $1 billion carbon-capture facility at an existing coal plant near Houston opened in 2016 and on budget. The Petra Nova project, which was funded partly with a $190 million federal grant, is the only one of its kind in the country.

Petra Nova sells its captured carbon to a Texas oil-field operator. Oil companies have long used compressed carbon dioxide to scour out the last bits of petroleum in conventional wells.

In North Dakota, "Project Tundra" would build upon the success of Petra Nova, according to its developers, led by Grand Forks-based Minnkota Power, an electricity cooperative prominent in northwestern Minnesota.

Project Tundra would entail an approximately $1.3 billion facility built next to a large Minnkota coal-fired power plant in central North Dakota. Minnkota is applying for a $15 million engineering and design grant from the federal energy department.

Xcel doesn't have any carbon capture projects in the works, though the company is open to the technology. "If the numbers work, yes, I would like to see carbon capture work," Xcel's Fowke said.

There also are carbon-free technologies that, while nascent, show long-term promise. One involves storage of the sun's heat energy. (Solar panels utilize the sun's light.) Another is the use of excess wind and solar power — a likely occurrence in a totally clean grid — to create hydrogen fuel through a process called electrolysis.

"I am technology agnostic on how we get there," said Xcel's Fowke.

Walz and DFL legislators are pushing the 2050 plan this year at the Capitol, attempting to increase the state's existing goal of 80% carbon-free power by 2050.

The legislation is likely to pass the DFL-controlled House. But a carbon-free-by-2050 bill has not yet received a hearing in the Republican Senate.

If the legislation fails, the clean grid issue isn't likely to go away.

Amid alarm over climate change, carbon-free energy goals are being debated across the country, with some states setting aggressive goals.

"It's great to have that aspiration from companies like Xcel and the governor," said Scott of the Great Plains Institute.

Mike Hughlett 612-673-7003